But is it really a record? Not if we score it by gold, the only real money. Then it’s clear that, although stocks have been rising lately, they are far from their heights of the late 1990s — 15 years ago.

The supposed “record” highs mainly are because the Federal Reserve Board has goosed the money supply since after the 9/11 terrorist attack in 2001.

There’s a chart showing that:

Notice how, even during the supposed “boom” of the early 2000s, the DOW, marked against gold, actually was decreasing.

Instead, look at this chart of the DJIA pegged against gold.

It shows that the DJIA still has not recovered where it was before 9/11, although it has done better recently. That means the national and California economic recoveries are hollow. They’re built on inflation.

Yet Gov. Jerry Brown and the Legislature have built their budgets on the assumption that the economy is in recovery, and will continue recovering. As Brown keeps insisting, “California is back.”

But if they’re wrong, when the next recession hits, we could again have deficits in the $20 billion to $40 billion range.

Friends of mine in the real estate industry tell me that the whole thing is softening now; that the recent gains in prices are over. Something similar happened in 2006 before the big real estate crash, followed by the national economic crash.

I’m not making any predictions. I’m only warning that it makes sense to be prepared. And California is not prepared.

Proposition 2, the Rainy Day Budget Fund Stabilization Act, is on the November ballot. But it hasn’t been passed yet. And it only would establish a modest fund.

Check out the following chart.

It shows that the current DJIA stock rally (blue line) is similar to the 2002 Nasdaq rally (grey line). If the pattern holds, a correction could be right around the corner.

Given that California’s state revenues notoriously depend on taxing high incomes and capital gains — what’s called “volatility” — a stock crash always slams revenues. So if a crash is coming, it could mean the return of the post-crash deficits of the early 2000s, which helped oust Gov. Gray Davis from office in the 2003 recall.

Again, I’m not predicting this. I’m only saying: Be prepared.

In fact, adjusted for inflation, the DJIA is the same as it was 12 years ago. As other numbers have indicated, such as median household income, there has been no economic progress for more than a decade, since the late Clinton-Gingrich years.

The economy has stagnated under the anti-free market policies of Republican President Bush, Democratic President Obama, the Republican and Democratic congresses of their years; and under the inflationary policies of Fed chairmen Greenspan and Bernanke, both Republicans.

Here’s the DJIA adjusted for inflation:

Notice, also, the strong growth from the Reagan tax cuts, which fully took effect in 1983, through the Clinton-Gingrich tax cuts of the late 1990s.

The country isn’t going to prosper again until: 1) The dollar is returned to stability, pegged to gold; with interest rates 2 percent above inflation (instead of 0 percent now). 2) Taxes are cut back to 1980s levels. 3) The hyper-regulations of the Bush-Obama years — Sarbanes-Oxley, Dodd-Frank, Obamacare — are repealed.

Freedom produces prosperity. Government expansion produces only stagnation.

By John Seiler

Here’s a heartening story.

From the time they go to preschool until the day they graduate from professional school three decades later, kids these days suffer relentless politically correct indoctrination. Their K-12 teachers and their university professors almost unanimously give them this message: “Government is good. Government is wonderful. Government will solve all your problems.”

Yet a new poll shows that 61 percent of college-age students want the government out of their lives.

Why? Well, kids are bearing the brunt of government tyranny. They’re being forced into Obamacare, whether they want to or not, which means they’ll be taxed heavily to pay for the ailments of older folks.

They pay massively into Social Security and Medicare. Yet I remember a poll a few years ago which showed more youngsters believe in UFOs than believe they’ll ever get an FDR dime out of these bankrupt socialist systems.

The kids run up college debt of as much as $200,000 — then can’t find jobs in the worst “recovery” in 70 years. Housing is so expensive they have to stay at home with Mom and Pop well into their 30s.

It’s hard to save enough money to get married and have kids. The Federal Reserve Board has kept interest rates at zero percent the past five years, even as inflation eats up the dollar’s value. “Savings” means the money in your savings account goes down in value 2 percent a year. The stock market is setting “records,” just over 15,000 for the DJIA, only because of inflation.

The wars of the federal government, which youngsters have to fight on the front lines, are inconclusive and seem pointless. And why are we spending trillions on hundreds of overseas bases to fight a Soviet Union that died so long ago no kid under 25 even remembers it?

But the kids have the Internet. So unlike my late 1960s, 1970s generation, which had few news sources beside the Main Stream Media, kids can find out what’s really going on from alternative Web sites; or at least get a contrasting point of view from what they’re fed by the military-industrial-Congressional-media-university complex.

This gives me hope for the future.

Next on the agenda: to get it out of their lives, the kids need to begin dismantling this monstrous government.